Jumbo Loans

What is a Jumbo Loan?
In most parts of the U.S., “jumbo” means a mortgage larger than $417,000. In some high-cost areas the threshold is $625,000. This is not a limit on purchase price, but rather on the loan amount. So to buy a home for $500,000 with 20 percent down, a borrower needs $400,000 – not a jumbo loan.

Most jumbo loans are issued to homeowners upgrading to a more valuable home. Lately, however, more and more jumbo loans are being sought by first-time home buyers.

Jumbo Loan Requirements

Requirements for jumbo loans are generally more stringent than for traditional loans. In fact, the larger the jumbo loan, the harder it can be to qualify. For loans up to $1.5 million, most lenders require a credit score of at least 700, a 20 percent down payment and cash reserves sufficient to cover up to 12 months of living expenses. For loans greater than $1.5 million, the lender may require 30 percent down and 18 months of cash reserves. Loans above $2.5 million could require even more cash up front (45 percent or more) and in reserve (up to 36 months).

First-timers will also need to carry a debt-to-income ratio of no more than 42 percent (lower for some lenders).

Get Pre-Approved
It is important to know what your buying power is before you go home shopping. Fill out the form below and one of our agents will contact you. We will gather important information, send it to various lenders and get you the best rate. We will give you a certificate of pre-approval which you will present to your Realtor. This will hep speed up the buying process.